Welcome to the Third Quarter 2015 Consolidated Results under IFRS Conference Call. My name is Sylvia and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session. Grupo Aval is an issuer of securities in Colombia and in the United States, registered with Colombia's National Registry of Shares and Issuers, RNVE, and the United States Securities and Exchange Commission. As such, it is subject to the control of the Superintendency of Finance and Compliance with applicable US securities regulation as a foreign private issuer under Rule 405 of the US Securities Act of 1933. Grupo Aval is not a financial institution and is not supervised or regulated as a financial institution in Colombia. Although we were not a financial institution until December 31, 2014, we prepared the consolidated financial information included in our quarterly reports in accordance with the regulations of the Superintendency of Finance for financial institutions and generally accepted accounting principles for banks to operate in Colombia, also known as Colombian Banking GAAP, because we believed that that presentation on that basis most appropriately reflected our activities as a holding company of a group of banks and other financial institutions. However, in 2009 the Colombian Congress enacted Law 1314 establishing the implementation of IFRS in Colombia. As a result, since January 1, 2015, financial entities and Colombian issuers of publicly traded securities, such as Grupo Aval, must prepare financial statements in accordance with IFRS as applicable in Colombia. IFRS as applicable under Colombian regulations differs in certain aspects from IFRS are currently issued by the IASB. Our 20-F annual report filed with the SEC provides a description of the principal differences between Colombian Banking GAAP and US GAAP as well as expected changes from our implementation of IFRS as applicable under Colombian regulation. The unaudited consolidated financial information included in this webcast is presented in accordance with IFRS as currently issued by the IASB. This webcast may include forward-looking statements, which actual results may vary from those stated herein as a consequence of changes in general economic and business conditions, changes in interest and currency rates, and other risk factors as evidenced in our Form 20-F available at the SEC webpage. Recipients of this document are responsible for the assessment and use of the information provided herein. Grupo Aval shall not be responsible for any decision taken by investors in connection with this document. The content of this document is not intended to provide full disclosure of Grupo Aval or its affiliates. When applicable, in this webcast we refer to billions as thousands of millions. Today the call will be conducted by Mr. Luis Carlos Sarmiento, CEO and President of Grupo Aval; Mr. Diego Solano, Chief Financial Officer of Grupo Aval; and Mrs. Tatiana Uribe, Investor Relations Officer of Grupo Aval. I will now turn the call over to Mr. Luis Carlos Sarmiento. Mr. Sarmiento, you may begin.

Thank you, Sylvia. Good morning and thank you very much for joining our call. Before we get going, let me start by apologizing for somewhat delaying this from its scheduled date. The IFRS world has not been devoid of learning challenges, and fine-tuning our numbers have proven challenging at times. In fact, we have adjusted our first and second quarter results, albeit not materially. I'm sure, however, that as we move forward and gain proficiency, we will streamline our accounting consolidation processes. With respect to Colombia's economic growth, expectations continue to be anchored around 3% for this year and similarly for 2016. As we have discussed in previous calls, the peso/dollar exchange rate has been significantly influenced by the price of oil and we saw again this correlation during the third quarter of this year. In fact, between June and September, we saw identical movements of approximately 20% in the exchange rate and in the price of oil. Needless to say, steep movements in the exchange rate bring along steep movement in the value of our dollar denominated risk-weighted assets. The economy continues to adapt to this foreign exchange reality, as imports continue to decrease while exports stabilize. Consequently, the country's current account deficit continues to show improvement, which bodes well for next year's growth expectations. In the meantime, unemployment continues to show acceptable levels. However, as we had predicted in our previous calls, inflation continued to creep up and, as of October on a 12 month basis had reached a level close to 6%. This led the Central Bank to tighten monetary policy be raising its reference rate by 50 basis points in October and an additional 25 basis points in November. Obviously, this effect was not felt during the third quarter, but we fully expect that the repercussions…

Thank you, Luis Carlos. Now starting on page five of the document, we present the evolution of some of the key macro drivers of our industry. Market consensus and GDP growth as reported by Bloomberg now stands at 2.8% for 2015 and 2.9% for 2016. These figures were slightly lower than those prevailing at the time of our previous call. We share the consensus with a slight positive bias. We continue to have a positive view on the impact of a more competitive peso, as well as on the impact of the fourth generation concessions and public-private initiatives on the economy. However, we expect their impact on growth to materialize in the latter part of 2016 and more substantially during 2017. Regarding unemployment, the last data point available is that for October 2015. The figure reported was 8.2%, up from 7.9% reported a year earlier and consistent with the slower GDP growth. Finally, positive data reflecting a reduction of the current account deficit during the second and third quarter of this year is emerging as a favorable sign for the Colombian economy. Moving to page six, we present inflation and some interest rate benchmarks. Twelve month inflation as of October was 5.89%, substantially above the Central Bank's upper limit of 4%, as well as substantially above market expectations. Even though market consensus of inflation has continued to rise, it has not yet incorporated this recent data. We expect 2015 inflation to be close to 6% and 2016 inflation to be above the Central Bank's upper limit of 4%. Consistent with recent inflation data, the Central Bank has raised its rates above previous expectations, accumulating 100 basis points over the last three monthly meetings, raising its intervention rate to 5.5%. We believe additional 25 to 50 basis point increases of the…

Thank you. [Operator Instructions] And the first question comes from Juan Dominguez from Credicorp Capital.

Good morning, and thanks for inviting us to this earnings call. I have a couple of questions, first regarding liquidity. You already mentioned that liquidity in October and November has improved. But, I wonder what are your expectations for next year, given that we will see an increase on test issuances competing with deposits in the financial sector on one side, and on the other side the government will not be as active in the deposit market as it is today. And secondly, I know that it's pretty soon to have any results, but I wonder if you can give us some - or actually if you can share your experiences on the recent launching of Aval Pay. I think that this is very disruptive for Colombia and I want to know what's the experience and what are the main differences with the app of Bancolombia.

Okay, Juan. I'll take the first one, and I'll pass the Aval Pay question to Luis Carlos, who is the brain behind this product. Regarding liquidity, actually yes, we saw an improvement during the past couple months in liquidity. Actually, the ratio would have measured - I don't have a number that I have calculated. But I estimate, based on what I've seen on our Colombian balance sheets, that around half of what was lost has come back. This would imply almost a couple percentage points of improvement in the past due loans ratio. But, your question might be the more relevant question when you're looking into next year. Even though we've seen this recovery, we now see a trend where loans continue to grow slightly faster than what deposits do. We see, even though we are pretty well positioned on the deposits to loan ratios, we see some of our competitors are in a weaker position. Therefore, we do expect this slightly tighter liquidity environment to be a new cycle that is quite different from what we had seen over the past two to three years. Part of what has been happening in Colombia was the monetary policy of the Central Bank hasn't been well transmitted to prices of deposits and loans. Particularly on the shorter horizons where DTF is calculated, it's precisely that, and excess liquidity that was flooding Colombia based on Colombian funding and also some influence of foreign investment into Colombia. Into next year, this cycle already somehow started several months ago where liquidity has drained out of emerging markets and the trend of additional liquidity in Colombia is tighter. Some of the drivers of that is what you mentioned, Juan, and it is less deposits from the government due to regulation, as well as lower royalties and tax collections from oil prices. In that environment, what we expect to see is perhaps some more positive base for a better pricing on our assets, though as I mentioned during the document, we need to be cautious on this, given that recent performance might point in a different direction. Now I'll pass the Aval Pay question to Luis Carlos.

Thank you, Diego. Well, I would say that Aval Pay has been so far a success that has exceeded our expectations. I would start by saying that by the end of this month we'll have 100,000 downloads of the app, which surpasses what we had thought we were going to obtain in the first couple of months. Aval Pay is nothing different than just a virtual wallet, and all we want to do is really simulate what a real wallet looks like. With for example, credit cards of - not entirely your own, but you can have credit cards of other banks as well. And you asked what the difference, the main difference with Bancolombia's virtual wallet was, and there you have it. In our wallet, you can put - in our virtual wallet, you can place any credit card of any bank in the country. And in Bancolombia's, it's only Bancolombia's credit cards. Aval Pay has been a huge success, I would say, especially with our young audience, with our young clients and in conjunction with the strategy that we've put in place two years ago of securing all the pre-purchase of tickets to concerts. And what we do is we have negotiated with a sponsor of concerts, with OCESA, a big Mexican company that sponsors concerts all over Latin America. We have secured with them that, before tickets are offered to the public in general they are only offered to either Aval Pay or Aval credit card customers. And obviously, this has had good receipt from our young audiences. And in conjunction, as I've said, with Aval Pay, I think that it's boding pretty well for the product. I think the most important thing of Aval Pay is really not what we have right now, but all the enhancements that we're working on. And I would say that over last – over the next six months, we will have enhancements that are really going to be innovations, and I think that it's going to be hard to match them. And so, I would say all in all Aval Pay has done pretty well. We have started to see a nice flow of transactions coming in through Aval Pay. But, obviously that is, when you do one of these initiatives, there are two pillars to them. One is to launch the product that technologically works, but the other one is to have it accepted by the businesses, and that is the end that we're working on right now. So, we'll have more and more businesses accepting Aval Pay as we go along. And we expect that by the end of December we'll have about 50,000 businesses accepting Aval Pay, and hopefully, we'll keep engaging more businesses as we move along. So, hopefully that sort of answers your question.

[Technical Difficulty] Hello, operator? Mauricio, I believe your line is open and the operator were not hearing you.

Okay. Can you hear me?

Yes.

Yes, Mauricio.

Okay. Hi, guys. Thanks for the call. A couple of questions, the first one on asset quality, if you can provide us more color on the trends. So, there were some improvements in this quarter. I would like to know how is the exposure of the Canal Diaz [ph] and if you expect some impacts in forthcoming quarters. The second question on the NIM. Given the changes in liquidity and on deals that you expect, which are the trends for the NIM next year? And finally, how do you see the capital ratios for Banco de Bogota evolving as well? Thank you.

Okay. Regarding asset quality, we had a positive quarter. However, as you might have heard us in the past, we continue to be cautious on the cycle. Cautious on the cycle means we do not expect a significantly different cycle relative to what we've seen year-to-date. But quarter-to-quarter variations are not representative of what could be the numbers moving forward. What we expect to see, as I mentioned before, is we should end this year at somewhere -- cost of risk between 1.6% and 1.7%. We're slightly more positive than we were before. Before we were expecting to be in the 1.7% area. This 1.6% to 1.7% figure already incorporates the Canal Diaz issue that you mentioned. We have a pretty small exposure to Canal Diaz relative to some of our larger peers. Our exposure is up close to $40 million. And the 1.6% to 1.7% cost of risk figure that I mentioned already incorporates having to substantially provision Canal Diaz during the remainder of this year. On your second question on changes on NIM with liquidity, there is a medium term and a short term effect of what has been happening with rates in Colombia. And this is at the time where the Central Bank rate is increased. We have a pretty fast repricing of our deposits that pressures our net interest margin. However, once prices are adjusted within, let's say, a couple months, we move to an environment where we benefit from higher inflation and higher interest rates, as any bank around the world does. Therefore, we have a positive view on longer term net interest margin, though cautious on the effort that we need to run from our banks of repricing as quickly as possible our loans based on the pressure we get from the Central Bank movement. Then the second piece of your questions that is liquidity that is not exactly the same as the Central Bank behavior. We believe it's a clear positive for banks, and particularly for banks that are better positioned on a deposit to loans basis. So, overall we see this environment as a positive environment for us. Finally, on capitalization of Banco de Bogota, I mentioned that we are keen on following what is happening with Banco de Bogota. There is no announcement to be made yet. But we're reviewing the way risk-weighted assets contribute to income as well as consume capitalization of the bank, as well as looking at each one of the lines of regulatory capital to see what should we consider to do to act on those lines.

Our following question comes from Boris Molina from Santander.

Yes. Thank you for taking my questions. I had a question regarding the outlook for your growth in loans and fees for next year. Now, we've seen the diminished expectations in terms of the impact of the 4G, in terms of potential loan growth due to higher funding cost and fiscal pressure from the government. So, how would you categorize your outlook for loan growth in Colombia in 2016 and in Central America? And my second question is related to Banco de Bogota again. You seem to be more keen on optimizing risk-weighted assets than to address the overall level of capital. But, it appears to us that regulatory changes or implementation of Basel III still has some impacts in Colombia that will probably affect Banco de Bogota still. So, do you feel that there is a potential need to do a capital increase in Banco? I thought you just recently concluded one.

Okay. Regarding your first question on loan growth, we might have been or let's say this year we were more cautious on loan growth than what actually showed up. We were expecting to see something in the lower teen’s area. And as you saw in the results we presented, it's clear that this year will end much higher than that, even taking away all the effect of depreciation. Part of what has happened is the slower growth of the Colombian economy was very much sensed inside the oil and gas industry, and as you might imagine, the oil and gas is not intensive in labor. Therefore, its impact on consumption and the overall economy has been quite mild. However, when you move a step ahead into next year, it does have an implication on lower tax and royalties revenues for the government. Therefore, the discussion is very much about government spending and the way consumer, the quality of employment and consumer behavior. In this kind of environment, we're looking into growth that could be in the 10% to 12% area. This growth should be homogenous at the system in the different categories of loans, that means corporate and consumers as well as mortgages. However, as we have been doing in the past, we should be able to outgrow in certain categories the system's growth. Regarding Central America, we continue to be quite positive. Central America actually has healthier GDP growth expected for next year than the Colombian one, at least 100 basis points higher. Therefore, it is moving on a more positive cycle. So we should expect to see more of the same as we've seen over the past few months. Now moving to your question on solvency of Banco de Bogota, I might have not seemed clear enough. But, yes, we're looking into risk-weighted assets, but more so are we looking into the capital structure or the regulatory capital of Banco de Bogota. When I mentioned on a line by line basis, this means that the only way to improve solvency is not only to capitalize the bank, it is to look at each one, at every single line of equity where we can do different things, some could be done on the primary capitalization, others could be done on the secondary capitalizations, such as subordinated bonds that, you can imagine, we are obviously considering as well. And things that we can do not only from the inflowing to the capital structure but also from the outflows on the capital structure. Therefore, we're actually looking at both, and it might be easier to act on the regulatory capital front than on the risk-weighted assets front.

We have no further questions at this time, and I will turn the call back to Mr. Sarmiento for closing remarks.

Thank you very much, Sylvia, and thank you very much for everybody who participated. Thank you, Diego and Tatiana. And see you next time.

I might add that you will shortly receive our historical quarterly results under IFRS starting at the beginning of 2014.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.